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1958 Supreme(Cal) 86
HIGH COURT OF CALCUTTA
Renupada Mukherjee, B. N. Banerjee
JAHED SHAIKH - Appellant
Versus
KAMALESH CHANDRA DAS - Respondent
Second Appeal 958 Of 1953
Decided On : MARCH 19, 1958
MAHENDRA KUMAR GHOSH, MUKTI MAITRA, MUKUNDA BEHARI MULICK, Rabindra Nath Mitra, SACHINDRA KUMAR BASU MAZUMDAR, USHA MUKHERJI
A party to an illegal agreement may rescind it while it remains executory and recover from the other party any money which he might have paid to him thereunder, although to enable him to do so, he must prove the making of the illegal contract as part of his case.
Headnote:
CONTRACT - UNLAWFUL AGREEMENTS - RECOVERY OF MONEY PAID - IRON AND STEEL (CONTROL OF PRODUCTION AND DISTRIBUTION) ORDER, 1941 - AGREEMENTS FOR ACQUISITION OF CORRUGATED IRON SHEETS WITHOUT PERMITS - WHETHER UNLAWFUL - WHETHER MONEY PAID CAN BE RECOVERED - PRINCIPLES OF ENGLISH LAW AND INDIAN LAW DISCUSSED.
Fact of the Case:
Plaintiffs paid money to defendant as advance for purchase of corrugated iron sheets. Defendant failed to deliver the goods or refund the money. Defendant claimed the agreements were unlawful as they violated the Iron and Steel (Control of Production and Distribution) Order, 1941, and therefore the money could not be recovered.
Finding of the Court:
The court found that the agreements were not per se illegal on their face and that even if they were unlawful, the plaintiffs were not in pari delicto with the defendants and were entitled to recover the money paid.
Issues: Whether the agreements for acquisition of corrugated iron sheets without permits were unlawful under the Iron and Steel (Control of Production and Distribution) Order, 1941.
Ratio Decidendi: The court held that the agreements were not unlawful on their face and that even if they were unlawful, the plaintiffs were not in pari delicto with the defendants and were entitled to recover the money paid. The court also held that the plaintiffs were not seeking to enforce unlawful contracts but were repudiating the agreements and seeking to recover their money, and that the law would allow them locus paenitentiae and permit them to recover the money paid.
Final Decision: The court allowed the appeals and decreed the suits in favor of the plaintiffs.
( 1 ) THESE two appeals involve the same question of law and are dealt with together.
( 2 ) ONE Radhakanta Das, now deceased, was, at all material times, a stockholder of and a dealer in corrugated iron sheets.
( 3 ) IN Second Appeal No. 891 of 1953 (arising out of money suit No. 84 of 1950), the plaintiff appellant, Jahed Sheikh, paid to the said Radhakanta Das (who was original defendant No. 1), in his said business, a sum of, Rs. 500/- as advance towards the price of ten bundles of corrugated iron sheets agreed to be sold by the latter to the former. The advance was paid on the 8th November, 1947, and is evidenced by a receipt, marked exhibit 1.
( 4 ) DEFENDANTS respondents Nos. 2 to 4 are said to be agents of Radhakanta Das, in the said business. The receipt, exhibit 1, was signed by defendant No. 2, Kamalesh, on behalf of defendant No. 1 Radhakanta. Defendants respondents Nos. 1 (1) to 1 (7) are heirs and legal representatives of the original defendant No. 1 Radhakanta, who were substituted, on the death of Radhakanta, in his place.
( 5 ) THE case made by the plaintiff, Jahed Shaikh, was that the defendants respondents did not deliver the goods agreed to be sold, nor did they refund the money advanced by the plaintiff. The plaintiff laid his claim at Rs. 600/- inclusive of compensation.
( 6 ) THE claim, made by the plaintiff, was contested by the defendants Nos. 1, 3 and 4. They denied the contract for sale of corrugated iron sheets and also the payment, by the plaintiff, of a sum of Rs. 500/-, by way of advance. Further, they denied that defendants Nos. 2 to 4 were agents of defendant No. 1, in the said business. Also, it was contended, that the contract was unlawful, being in contravention of the Iron and Steel (Control of Production and Distribution) Order, 1941, and as such, the plaintiff was not entitled to get a refund of the money advanced.
( 7 ) IN Second Appeal No. 958 of 1953 (arising out of money suit No. 21 of 1950) Ali Aktar Hossain, plaintiff appellant, paid to Radhakanta Das, now deceased (who was original defendant No. 1), in his business, a sum of Rs. 4243/- as advance towards the price of 97 bundles of corrugated iron sheets, agreed to be sold by the latter to the former. Respondents Nos. 1 (1) to 1 (7) are heirs and legal representatives of Radhakanta Das, now deceased.
( 8 ) THE case made by the plaintiff Ali Aktar Hossain was that defendant No. 1 Radhakanta, jointly with defendants respondents Nos. 2 to 4, carried business as stockholders of and dealers in corrugated iron sheets. Pro forma defendants respondents Nos. 5 to 13, being in need of corrugated iron sheets, approached the plaintiff with a request to secure for them corrugated iron sheets. The plaintiff negotiated with defendants Nos. 1 and 2 and entered into the agreement aforesaid. Pro forma defendants Nos. 5 to 13 had paid the price in the hands of the plaintiff, which amount he advanced to defendant No 1, on the 6th May 1947, and obtained a receipt (also marked exhibit 1 in money suit No. 21 of 1950j. Delivery of the corrugated iron sheets was not made as agreed upon, nor was the money advanced refunded to the plaintiff. The plaintiff in his turn had, however, to return the money, paid in his hands, to proforma defendants respondents Nos. 5 to 13. In these circumstances, the plaintiff appellant, Ali Aktar Hossain, filed money suit No. 21 of 1950, and laid his claim at Rs. 4500/- inclusive of compensation.
( 9 ) THE claim made by the plaintiff AH Aktar Hossain was contested by the principal defendants on lines similar to that taken in money suit No. 84 of 1950, hereinbefore indicated.
( 10 ) IN both the cases, the Courts of appeal below found that there were agreements made, as stated by the plaintiffs in the two suits, and that the two sums of money had actually been paid by the respective plaintiffs, in the two suit, to defendant No. 1 Radha Kanta Das. The claims made by the respective plaintiffs, in the two s
